Tag: budgeting

5 SURPRISING THINGS YOU CAN DO WITH YOUR CANADIAN TAX REFUND (THAT AREN’T SHOPPING)

Post author By Brandon Smith
Post date April 3, 2023

What is a Canadian tax refund?

In April, Canadians must pay their income tax liability for the prior year and when most Canadians file their income tax returns. Getting a Canadian tax refund can be an amazing experience for numerous Canadians. It’s like obtaining an unexpected reward from the federal government. The idea of having extra money to spend can be thrilling as well as inspiring, and it can offer a sense of relief and security for those that might be battling financially.

Even just the knowledge that you will be getting a tax refund is exciting, as taxpayers excitedly wait for the confirmation of how much money they will be getting back. Everyone uses this time to think about how they are going to spend their refund. Overall, the enjoyment of receiving a tax refund is a favourable experience.

But what is a Canadian tax refund? Following the filing of their annual income tax return to the Canadian government, a taxpayer may receive a sum of money known as a tax refund. This refund represents the variance between the total amount of taxes paid by the taxpayer throughout the year and those they actually owe, based on their income and tax deductions/tax credits. In the event that a taxpayer has paid more taxes than they are required to, they will be issued a refund for the surplus amount.

While many people find it appealing to go on a shopping spree or book a holiday with that extra cash, there are really a lot more surprising and also functional things to use for your Canadian tax refund. In this Brandon’s Blog, I will explore 5 things you may not have thought about that you can do with your reimbursement that will certainly not only profit you financially but also assist you to accomplish your long-term objectives.

From investing in your retirement to repaying some financial debt, these alternatives might not be as interesting or exciting as a brand-new wardrobe or a journey to an exotic location, but they can have a substantial effect on your financial well-being. So, before you hit the shopping centre or book your next trip, take a minute to take into consideration these alternate suprising ways to use your tax refund. You may be amazed at just how much more satisfying it is to put that money towards something that will benefit you financially in the future. Let’s jump in!

5 surprising things you can do with your Canadian tax refund

It’s that time of year yet again – tax time. While it can be a difficult time for many, there’s always the possibility of a silver lining: the opportunity for a tax refund. According to the Canadian federal government, the average Canadian tax refund was $2,086 in 2022. There are at least 5 surprising things you can do with your Canadian tax refund that isn’t shopping.

So if you’re questioning what to do with your Canadian tax refund this year, keep reading – you could be surprised by the choices available to you. Here are the 5 ways that will help with your financial planning and money management:

1. Utilizing your Canadian tax refund to plan for your retirement is a wise decision.

Here are some practical ways to achieve this:

Establish an RRSP: It is recommended to open an RRSP account with a reputable financial institution or insurance company as a means of building your retirement savings. You can contribute up to 18% of your previous year’s earned income, up to the 2023 limit of $30,780. This approach enables you to save more for your future while minimizing your tax liability today. As a result, every dollar of your Canadian tax refund will have a meaningful impact on your retirement fund.
Make a contribution to your existing RRSP: Use your Canadian tax refund to make a contribution to your existing RRSP account. The payment is tax-deductible, which will lower your taxable income and therefore your 2023 tax obligation.
Select your financial investments: Choose exactly how you wish to invest the money within your RRSP. You can select from a potpourri of financial investment options, all depending on your risk tolerance and how far away from retirement you are. This is an important element of financial planning.
Monitor and also readjust your portfolio: Frequently review your investment portfolio to make sure that it is aligned with your long-term goals. Make changes if essential to make certain that you’re on track to accomplish your retirement goals.

Investing in your retirement is a wonderful way to guarantee that you have adequate cash to support your lifestyle after you quit working. By using your Canadian tax refund to make payments to your RRSP, it is both good financial and tax planning because you’re capitalizing on a tax-efficient method to save for your future.

2. Donate to a charity or a cause you care about

Contributing all or a part of your Canadian tax refund to a charity that you believe in is a fantastic way to produce a positive impact on the world. Follow these sensible actions to make a distinction:

Select a charity: Donate to a charity that resonates with your values and beliefs. You can choose one or more charities that contribute either to your local area or anywhere around the world.
Make a contribution: Use your Canadian tax refund to make a donation to your chosen charity. The majority of charities accept contributions via online platforms, and many permit automatic month-to-month contributions.
Think about a matching gift: Examine if your company provides a donation program to specific charities that match the amount of money you donate to. See if any of those charities appeal to you.

3. Pay off high-interest debt

Using your Canadian tax refund to pay off high-interest debt is a clever way to improve your financial situation. Below are some actions you can take:

Determine what your high-interest debt is: Take a look at your debts and find those with the greatest rate of interest. These are commonly credit cards, personal loans, or payday advances.
Establish the total up to pay off: Calculate just how much of your Canadian tax refund you can afford to use to repay the high-interest financial debt. It’s of course best to be able to pay off the entire debt, but if you can’t, pay down as much as you can of the high-interest rate debt.
Make the repayment: Use your tax refund to repay in full or pay down the highest-interest rate debt first. Make certain to comply with any payment conditions set by your lender or financial institution.
Prevent accumulating brand-new financial debt: Once you’ve settled the high-interest financial obligation, stay clear of building up new high-interest rate financial debt by budgeting your expenses and restricting your use of credit cards. You don’t want to start increasing high-interest-rate debt again after you have paid it off.

Settling high-interest debt is a clever financial action since it can conserve your money in the future by reducing the amount of interest you’ll pay. It can also help improve your credit rating, which can help you in the future when you need to apply for a home or car loan. By using your Canadian tax refund to settle high-interest debt, you can take a step in the direction of financial stability and ultimately freedom from debt.

4. Take a course or learn a new skill

Utilizing your Canadian tax refund to take a program or discover a brand-new skill can be a fantastic financial investment in yourself as well as your future. Here are some steps you can take:

Select a training course or skill: Determine a course or skill you wish to learn that can benefit you in your work or personal development. This can be an accreditation program, a language course, or a skills workshop.
Study choices: Look for reliable establishments that supply the program or skill you intend to learn. You can additionally look for online options or free courses offered on the internet.
Determine the cost: Establish the overall price of the program or skill, including any kind of materials or books you might need to acquire.
Pay for it with your tax refund: Use your Canadian tax refund to pay for the course or skills training. This way you don’t have to pay any money to invest in your personal growth.
Devote yourself to learning: Once you have actually enlisted in the training course or skills workshop, dedicate yourself to completing it. Set aside time each week to attend class, do homework and study. Stay encouraged by setting objectives and tracking your progression.

Using your Canadian tax refund to further your education and learning can help your personal development and your career, or just find a brand-new interest. By using your Canadian tax refund to take a course or discover a brand-new skill, you’re making a wise financial investment in your future.

5. Start or add to your emergency fund

Using your Canadian tax refund to begin or contribute to your emergency fund can be a clever way to plan for unforeseen expenses. Here are some steps you can take:

Establish just how much to save: In previous Brandon’s Blogs, I have recommended that everyone have an emergency fund of 3 to six months’ worth of household expenses in their reserve. Calculate how much you must save based on your monthly household expenses.
Open a separate account: Open up a separate savings account for your emergency reserve. Treat this account as untouchable, except in the case of a real emergency. This will make it less complicated to track any emergency expenses you must pay from this account. You must honestly treat this account as being “in case of emergency break glass” and not use it as a nice place to get some money from whenever you feel like it.
Set up automated transfers: Set up automated transfers from your everyday bank account to your emergency fund interest-bearing account. This will allow you to maintain the discipline of saving monthly from your income and avoid forgetting to contribute to your fund.
Use your Canadian tax refund: Use your tax refund to make a round-figure payment to your emergency reserve. This can assist you in reaching your savings objective faster.
Stay clear of utilizing the cash for non-emergencies: Resist the lure to utilize your reserve for non-emergency expenses. Keep the cash in the account until you need it for unexpected emergency expenses like additional medical costs, a major auto repair bill, or in case of job loss.

Beginning or contributing to your emergency fund can provide additional financial security when faced with unforeseen expenses. Use your Canadian tax refund to jumpstart your financial savings. You are taking positive action to reach financial stability and freedom.

Canadian tax refund conclusion

In conclusion, your Canadian tax refund presents an opportunity to do more than just indulge in shopping sprees. By exploring alternative uses for your refund, you can not only make the most out of your money but also achieve various personal and financial goals. Whether it’s investing in your future, contributing to a cause you care about, or simply treating yourself to an experience, the possibilities are endless. So, before you hit the stores or add to your cart, take a moment to consider these surprising options and think outside the box. Your tax refund could be the key to unlocking new opportunities and experiences that will enrich your life for years to come.

I hope you enjoyed this Canadian tax refund Brandon’s Blog. Revenue and cash flow shortages are critical issues facing people, entrepreneurs and their companies and businesses. Are you now worried about just how you or your business are going to survive? Are you worried about what your fiduciary obligations are and not sure if the decisions you are about to make are the correct ones to avoid personal liability? Those concerns are obviously on your mind. Coming out of the pandemic, we are also now worried about the economic effects of inflation and a potential recession.

The Ira Smith Team understands these concerns. More significantly, we know the requirements of the business owner or the individual that has way too much financial debt. You are trying to manage these difficult financial problems and you are understandably anxious.

It is not your fault you can’t fix this problem on your own. The pandemic has thrown everyone a curveball. We have not been trained to deal with this. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team makes use of new contemporary ways to get you out of your debt problems while avoiding bankruptcy. We can get you debt relief now.

We have helped many entrepreneurs and their insolvent companies who thought that consulting with a trustee and receiver meant their company would go bankrupt. On the contrary. We helped turn their companies around through financial restructuring.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

The Ira Smith Trustee & Receiver Inc. team understands that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will listen to the unique issues facing you and provide you with practical and actionable ideas you can implement right away to end the pain points in your life, Starting Over, Starting Now.

Brandon Blog Post

FINANCIAL LITERACY IN CANADA: EXCEPTIONAL MONEY MANAGEMENT SKILLS ARE CRUCIAL

Post author By Brandon Smith
Post date August 17, 2020

The Ira Smith Team is totally operational and both Ira and Brandon Smith are here for a telephone consultation, conference calls, and virtual meetings.

Keep healthy and safe everybody.

If you would prefer to listen to the audio version of this Brandon’s Blog, please scroll to the very bottom and click on the podcast.

**What is financial literacy in Canada**

Financial literacy in Canada is having the skills and expertise to make informed decisions concerning managing your money. Recognizing basic financial ideas allows people to understand just how to navigate the financial system. People with financial literacy skills make better monetary decisions and handle cash much better than those without these skills.

We remain in uncharted waters currently in Canada. The COVID-19 pandemic has actually called for the Canadian government to give economic support programs to both individuals as well as businesses. Canadians’ 2019 personal income tax obligation payment due date has been extended and is due September 30, 2020. The Canada Emergency Response Benefit (CERB) payments are ending soon. The Canada Emergency Wage Subsidy (CEWS) will end in December 2020.

Where will Canadians end up when government subsidies end? LendingArch has reported that there has been a 1000 percent increase in demand for debt relief and loan refinancing among Canadians. So I thought it would be an opportune time to discuss the state of financial literacy in Canada.

**Why is financial literacy in Canada important?**

Financial literacy in Canada requires to begin with student education. It will aid students to:

Thoroughly consider their money options. This can relate to daily decisions, like acquiring groceries to bigger investments, like spending for tuition or getting a vehicle.
Understand fundamental money management.
Create their very own point of view on financial issues, such as rates of interest, home mortgage guidelines, or the Canadian or worldwide economy.

Financial literacy in Canada and money management go hand in hand

Establishing excellent finance practices like budgeting at an early stage in life is essential to financial wellness in the long term. Without fundamental financial literacy abilities, individuals are a lot more quickly tempted right into financial debts: utilizing credit cards, extending lines of credit, and also taking out high-interest predatory loans, without totally comprehending the ramifications of paying back those financial debts.

Many individuals have a difficult time talking about money at home too. The research I talk about below shows that typically, Canadians’ financial literacy in Canada is above average. Nonetheless, at the very least one study reveals Canadian moms and dads prefer to speak to their youngsters regarding sex than money matters. Not comprehending the fundamentals of finance could send their children into a financial freefall. The topic of this blog is not sufficiently wide to talk about the ramifications of children not understanding the concepts of responsible and safe sex!

Perhaps it comes down to financial preparedness and confidence.

**How is financial literacy in Canada assessed?**

The Programme for International Student Assessment (PISA) is an international survey that intends to assess education systems around the world by evaluating the abilities and also understanding of 15-year-old pupils in topics like science, math, reading, joint problem resolving, and financial literacy.

In the 2015 PISA survey, Canada took part in it for the very first time. PISA does not measure academic success in relation to each institution’s curricula. It does examine pupils’ capacity to apply understanding and abilities as well as to examine, reason, and also connect effectively as they examine, assess, and resolve problems. The results supply a crucial standard step for financial literacy in Canada.

The Council of Ministers of Education, Canada (CMEC) reported that in 2015, Canadian 15-year-old students attained an above-average score. Amongst the 15 countries and economies that joined the 2015 PISA financial literacy study, only one, China, outmatched Canada.

A different 2015 research revealed that overall Canadians stack up well on financial literacy contrasted to their peers in other places of the world. For example, the 2015 Organisation for Economic Co-operation and Development (OECD) Survey on Measuring Financial Literacy and Financial Inclusion measured respondents’ financial knowledge, attitudes, and behaviours. It ranked Canadians’ overall financial literacy third out of 29 countries.

The results were that only 61% of Canadians could correctly answer five of seven financial knowledge questions. That is what gave Canadians’ overall the financial literacy standing of 3rd place.

So it appears based on these 2015 studies, that Canadian youth on average as a group score better than Canadians as a whole, although overall financial literacy in Canada is above average. Presumably, it is the Canadian school system teaching financial literacy that might account for the overall better performance of 15-year-old Canadians versus a mixed age group.

**How is financial literacy in Canada taught in Ontario schools?**

The Ontario government has recently overhauled its financial literacy education and learning program. Pupils in grades 4-12 learn about financial literacy so they can comprehend just how to make enlightened financial choices.

Financial literacy belongs to the elementary and secondary schools’ educational programs in many different subjects such as mathematics, social studies, Canadian and world studies and also business studies. In some subjects, pupils may be learning details of and abilities for understanding money and money management, consumer education, savings and budgeting. This will certainly help them create financial literacy in Canada abilities. In various other subjects, financial literacy connections may be made as pupils learn more about their place in the world, as a responsible and caring person or when they examine different economic systems.

**What resources are available to teachers for classroom use to teach financial literacy in Canada?**

Via the educational program, pupils are creating abilities in critical reasoning, decision-making as well as solving problems that can be applied for both education and also to real-life circumstances. Resources have been created for teachers to help them connect financial literacy topics across the curriculum to grow the students’ discovering and making financial literacy in Canada much more meaningful to them.

Teacher videos, guides and lesson plans are developed to supply financial literacy teaching are developed to assist.

**What resources are available for teachers to help parents support their children’s financial literacy in Canada?**

Moms and dads have an essential duty to play in supporting their children to create the skills, knowledge, and behaviours to navigate today’s significantly complicated economic world. Parent resources have been established to highlight the Ministry of Education’s financial literacy in Canada methodology and to direct parents in engaging their youngsters in financial literacy matters. These sources can be made use of to support discussions at parent-teacher evenings, student fairs, and various other parent-child learning situations.

The Financial Consumer Agency of Canada has actually developed an outline based on best practices in assessment methodology and what it has discovered in assessing its very own financial literacy sources and program. The provincial Ministries of Education have developed their very own programs as mentioned above with this guidance.

Even though on average Canadians score above average in a financial literacy test, Canadians still don’t feel confident they know everything they can about financial planning.

Huffington Post Canada reported that over half of Canadians are only $200 away from insolvency, and 31 percent don’t make enough to cover their bills, according to a recent poll of 1,500 Canadians.

Alison Carson, Oakville, Ont. high school teacher wished she found out the most effective method to invest her money. As a teacher, a large part of her paycheque goes into her pension plan. She says she relies upon her employer to invest her money in such a way that will offer her the very best retirement possible. However, she doesn’t know enough regarding exactly how it all works to keep track of it.

“I just trusted that if there was a problem … that someone more financially literate than me would’ve figured that out, and there would be some article written about it, and I would read the article,” she said.

**Ontario Securities Commission Investor Education Fund (IEF) supports financial literacy in Canada**

Started by the Ontario Securities Commission, the IEF site offers individual finance advice for consumers in various life situations as well as resources for instructors and students. It supplies an excellent introduction of the major types of investments – stocks, bonds, mutual funds, RRSPs – as well as uses a range of calculators, worksheets and tests.

This website, which combines the instructional resources of all 12 U.S. Federal Reserve Banks and the Board of Governors of the Federal Reserve, offers public and class resources on business economics, personal finance, banking, and money management. It also offers interactive tools and games for grades K to 12; as well as web links to various other sites of financial education and learning (within and outside the U.S. Federal Reserve system).

This is their contribution to financial literacy in Canada.

Financial literacy in Canada summary

I hope you enjoyed this financial literacy in Canada Brandon’s Blog. November is Financial Literacy Month in Canada. Throughout November, organizations and individuals from across the country are encouraged to host and participate in events and share resources aimed at helping Canadians learn how to manage their personal finances successfully. But we don’t have to wait until then to begin learning.

The Ira Smith Team family hopes you and your family are staying safe, healthy and well-balanced. Our hearts go out to every person who has been affected either through inconvenience or personal family tragedy.

We are all citizens of Canada and we have to coordinate our efforts to stop the spread of the coronavirus. Social distancing and self-quarantining are sacrifices that are not optional. Family members are literally separated from each other. We look forward to the time when things can return to something close to normal and we can all be together again physically.

Ira Smith Trustee & Receiver Inc. has always employed clean and safe habits in our professional practice and continues to do so.

Revenue and cash flow shortages are critical issues facing entrepreneurs and their companies and businesses. Should you take advantage of the CEBA? I say a resounding YES!. I just wanted to highlight all of the issues that you should consider.

If you need financial help right now, feel confident that Ira or Brandon can still assist you. Telephone consultations and/or virtual conferences are readily available for anyone feeling the need to discuss their personal or company situation.

Are you now worried just how you or your business are going to survive? Those concerns are obviously on your mind. This pandemic situation has made everyone scared.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

We understand that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

The Ira Smith Team is totally operational and both Ira and Brandon Smith are here for a telephone consultation, conference calls and virtual meetings.

Keep healthy and safe everybody.

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Brandon Blog Post

BANKRUPTCY IN CANADA: THE STEP-BY-STEP CANADIAN PERSONAL BANKRUPTCY PROCESS

Post author By Brandon Smith
Post date February 5, 2020

Introduction

The purpose of this Brandon’s Blog is to explain to you the personal bankruptcy in Canada process. By doing so I hope it will be a less scary topic for you.

Are you insolvent?

The first step is meeting with the trustee to explore options. The first thing the licensed insolvency trustee (formerly called a bankruptcy trustee) (Trustee) needs to determine is if the person is insolvent.

Insolvent means that you cannot pay your debts as they come due and that if you liquidated all of your assets it would not be enough to repay all of your liabilities. If you’re not insolvent then you cannot take advantage of the provisions of the Bankruptcy and Insolvency Act (Canada).

What are my options?

If you’re not insolvent the options that are available to you are:

help with your budgeting;
perhaps credit counselling mixed in with that to help you better understand your income and expenses; and
how to live within your means

Perhaps also there is the opportunity, if you still have a good enough credit score, to get a debt consolidation loan. This would be a loan that would be equal to the total of all your other debts but at a lower interest rate and with a smaller monthly payment than the total monthly payments you currently need to make to stay current with all your debts.

If you are insolvent then the options available to a person is either a:

consumer proposal; or
bankruptcy

bankruptcy in canada

The purpose and topic in this blog are bankruptcy so that is what I will focus on. There will be other videos made on the topics of a consumer proposal, budgeting, credit counselling and debt consolidation.

How does bankruptcy in Canada work?

So the personal bankruptcy in Canada process as I mentioned starts with meeting the Trustee to explore your options. Then with the Trustee, determining whether or not you are insolvent and then making the right choice. Does that mean that bankruptcy is the best process for your needs, or can you avoid bankruptcy?.

So given that we’re talking about bankruptcy in Canada, what are the steps? First, the Trustee will prepare the documentation for your review. The documentation consists mainly of the assignment in bankruptcy document, your statement of affairs and your monthly family budget.

The statement of affairs is a multi-page document that indicates what your assets are and the names and addresses and individual amounts owing to each of your creditors. Your monthly family budget shows your monthly cash in and cash out.

An important part of the bankruptcy in Canada process is rehabilitation. Financial rehabilitation. So it is expected upon entering personal bankruptcy in Canada that your monthly family budget will balance. That is your income after tax will be sufficient to pay your monthly family expenses.

What does declaring bankruptcy mean in Canada?

Once that is all prepared and you’ve sworn your statement of affairs the Trustee can begin the bankruptcy process itself. That includes e-Filing the documentation I just spoke about with the Superintendent of Bankruptcy’s local office.

The Superintendent of Bankruptcy local office representative will review it to make sure that it is all in order. Then the local office will issue a certificate confirming your bankruptcy and the appointment of the Trustee.

It is at the time when the Superintendent actually issues the certificate that the person’s bankruptcy starts.

So when bankruptcy occurs then certain things must happen. The bankruptcy administration takes place. The bankruptcy administration will include:

Providing the trustee with any non-exempt assets that you may own. The Trustee will sell those assets to raise money to be able to make a distribution of some sort to your creditors.

The next part of the bankruptcy administration is that the bankrupt person must attend 2 counselling sessions for personal bankruptcy in Canada. These two counselling sessions are meant to help the person financially rehabilitate themselves.

You will discuss with the Trustee things such as budgeting, issues that led you into bankruptcy and how you can correct that behaviour and any problems you might be experiencing during the bankruptcy process.

Finally, if all goes well there is the bankruptcy discharge. That is where the person has made it through and upon their discharge, they are discharged of all of their debts other than those that might be secured, have a trust claim status or meet the definition of those few types of debts such as court fines and penalties that cannot be discharged by way of bankruptcy.

But things like credit card debt and income tax debt are discharged through the bankruptcy process.

Personal bankruptcy Canada

So if you have debt issues meet with a Trustee. There is no charge to do so and you will walk away with a better idea of how to fix your debt issues with or without resorting to personal bankruptcy in Canada.

I hope you enjoyed the bankruptcy in Canada video. The Ira Smith team is available to help you at any time. We offer sound advice and a solid plan for Starting Over Starting Now.

We understand your pain. We will make sure that no bill collectors call you. We will take all the headaches and stress you are experiencing off of your hands and put it onto our shoulders. We will fix things so that you can move forward in a healthy way, pain-free, guilt-free and debt-free.

It is not your fault that you are in this situation. You could not fix it yourself because you have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team uses new ways that will return you immediately to a stress-free life while getting rid of your debt.

So that you can immediately be well on your way to debt and stress-free life in no time, for more information on a no-cost basis, please call us now.

The Ira Smith Team comprehends just how to do a complex restructuring. However, more notably, we understand the needs of the business owner or the person that has too much personal financial debt. You are worried due to the fact that you are encountering significant economic obstacles.

It is not your mistake that you are in this scenario. You have been only shown the old ways which do not function anymore. The Ira Smith Team utilizes new contemporary ways to take you out of your financial debt problems while preventing bankruptcy. We can get you financial debt relief.

The stress and anxiety placed upon you is massive. We comprehend your discomfort factors. We look at your entire situation and also devise a technique that is as special as you and also your issues; economic as well as emotional. The methods we use takes tons off of your shoulders. We devise a financial debt negotiation strategy, we understand that we can help you.

We understand that individuals encountering monetary troubles need a reasonable lifeline. There is no “one solution fits all” method with the Ira Smith Team. That is why we can create a restructuring process as unique as the financial problems and also discomfort you are encountering. If any one of these seems familiar to you and you are serious about getting a solution, contact the Ira Smith Trustee & Receiver Inc. team today.

Call us now for a no-cost appointment. We will certainly get you or your firm back driving to healthy stress-free operations as well as save you from the discomfort factors in your life, Starting Over, Starting Now.

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Brandon Blog Post

BUY NOTHING DAY CANADA: WILL IT HAVE ANY EFFECT ON HOLIDAY SHOPPING

Post author By Brandon Smith
Post date December 4, 2019

Introduction

Buy Nothing Day Canada is part of an international day of protest against consumerism. In North America, it takes place on the Friday after U.S. Thanksgiving. That is the same day as Black Friday. Elsewhere, it is held on the last Saturday in November.

It is a Canadian invention. Founded in Vancouver by creator Ted Dave in 1992 it was subsequently advertised by Adbusters magazine, based in Canada.

In this Brandon’s Blog, I discuss what effect, if any, Buy Nothing Day Canada has on Black Friday, Cyber Monday and holiday shopping in general. I also provide some tips on how not to go deep into debt from holiday spending.

What is the purpose of Buy Nothing Day Canada?

Buy Nothing Day Canada and worldwide, it is meant as a day for society to take a look at the problem of over-consumption. In 2000, Adbusters tried to purchase advertising time on television to promote Buy Nothing Day Canada and elsewhere were rejected marketing time by nearly all significant TV networks besides CNN.

Notwithstanding, it has become a grassroots movement. Campaigns started showing up in the USA, the United Kingdom, Israel, Austria, Germany, New Zealand, Japan, the Netherlands, France, Norway and Sweden. Currently, it is held in about 65 countries.

Doubters of the day feel that it merely:

shifts people’s buying habits to the next day; or
appeals really only to those people who rebel against over-consumerism all year through.

Is it effective?

Based on a recent study, I think Buy Nothing Day Canada is meaningful only to those who already practise a lifestyle against over-consumerism. This study says that Canadians will spend approximately$1,593 per person for the 2019 holiday season. This is a little up from $1,563 (or 1.9 percent) in 2018, according to the same report.

For many years now, there have been reports that say Canadians are over their heads in debt. They are living paycheque to paycheque. On average, Canadian adults are $200 away from financial disaster. I have written several blogs on the topic of Canadian households in debt.

So, from what I can tell, this movement has no effect at all on holiday shoppers.

Must I resort to a buy nothing Christmas?

Black Friday and Cyber Monday are over. You may feel you overdid it on your holiday spending last year. Perhaps it put you in a bad place that took a lot of time to get out of. You don’t wish to repeat it going into 2020.

So I have created a holiday spending in Canada tips list to try to assist with your budgeting for the holidays. Ideally, by following my suggestions, you won’t get in the brand-new year with more financial debt that you cannot handle. You will have avoided one of the most typical holiday spending blunders.

By following my tips, you can buy gifts and remain financially healthy without resorting to shopping abstinence.

But first, it all starts with a budget

You don’t need to adhere to a Buy Nothing Day Canada philosophy, but you do have to live within your means. So, the overall key is proper budgeting for holiday spending. It is so vital that you think out your holiday budget before you start spending.

I believe there are 3 major classifications to your Xmas holiday spending plan:

presents;
food and beverage in your home if you are hosting; and
tree and decors.

To begin setting your holiday budget plan, you need to establish 3 separate mini-budgets; one for each item. For gifts, the first thing is to detail out everybody you feel you would like to buy a gift for. After that reduce the list to everyone you really must buy a present for. You may not be able to manage your “desires”, but only your “needs”. The various other classifications will be easier to establish.

Now, check out your regular monthly earnings and expenses as well as any kind of savings you might have designated for holiday costs. This will help you to understand just how much you can afford to spend without going into holiday spending financial debt. Simply figure out the amount you can safely spend.

With that total, you should estimate your spend in the food and drink and tree and decors groups. What you have leftover in total will be your gift spending plan. Nothing is set in stone. If you feel you require to readjust the allowances among the 3 categories, go right ahead. Eventually, you will be left with your present total spending plan.

Now spread out the total gift budget among the people. Your specific amounts need to add up to a number not higher than the total you established as your total gift spending amount. With the budgeting worksheets finalized, it is now time to go shopping!

Holiday spending in Canada tips list

Purchase with objectives – You have determined just how much you can safely spend on each person. Get the best gift possible for each that satisfies your spending budget. Stick to the financial limitations of your gifts. You can now spend more time focussing on the appropriateness of the gift within your budget limitations.

Only spend cash don’t buy on plastic – You will be lured to buy with your charge cards. Using plastic will cause you to overspend due to the fact that you will not feel the purchase. To truly feel it, you must only use cash. When you feel it, you don’t spend beyond your means. You will also stay clear of the nasty shock in January since you won’t get an unmanageable credit card statement. You will feel terrific in both December and January.

Think of a family present to conserve cash – If you feel you will not be able to afford specific gifts, think of people in the very same family and search for a household present. A gift card for the household to go see a movie or a family pass for admission to a tourist site may turn out to be cheaper than the overall cost of separate gifts. Or one thing for their home that you feel all family members will take pleasure in. Look at that option. There are many opportunities for a group gift.

Give an experience, not simply your money – Do not think that the only gift that counts is one that sets you back the money. You have numerous abilities and talents. Probably one or more would certainly make an excellent present. If you cannot think of anything special you can give of yourself to that special someone that would make a wonderful present, how about your time? Think to babysit for nieces or nephews. How about helping out an ageing relative because they can’t go out a lot on their own but have appointments or tasks to get. These can all count as useful presents that won’t cost you anything or much in any way. Your time and enjoying each other’s company are much more valuable than any gift you would buy in the mall or online.

Think outside the gift box – If you do not have a box of ornaments from years past to use, think artistically. The accessories bought at a Dollar Store will look just as good on your tree as ones bought at a more expensive specialty shop. Or, use your own imagination to make your own. If you aren’t sure where to start, look online. There are many video clips to reveal step-by-step how to make terrific looking ornaments that don’t cost too much for materials. Your creativity and labour, of course, is cost-free.

Summary

I hope you found this Brandon’s Blog on Buy Nothing Day Canada and my holiday spending tips useful. Are you in need of financial restructuring? The financial restructuring process is complex. The Ira Smith Team understands how to do a complex restructuring. However, more importantly, we understand the needs of the entrepreneur or the person who has too much personal debt. You are worried because you are facing significant financial challenges.

It is not your fault that you are in this situation. You have been only shown the old ways that do not work anymore. The Ira Smith Team uses new modern ways to get you out of your debt troubles while avoiding bankruptcy. We can get you debt relief freedom.

The stress placed upon you is huge. We understand your pain points. We look at your entire situation and devise a strategy that is as unique as you and your problems; financial and emotional. The way we take the load off of your shoulders and devise a debt settlement plan, we know that we can help you.

We know that people facing financial problems need realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team. That is why we can develop a restructuring process as unique as the financial problems and pain you are facing. If any of this sounds familiar to you and you are serious in finding a solution, contact the Ira Smith Trustee & Receiver Inc. team today.

Call us now for a free consultation. We will get you or your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

Tags Black Friday, brandon’s blog, budget, budgeting, buy nothing christmas, buy nothing day, buy nothing day canada, Cyber Monday, financial restructuring, holiday budgeting plan, holiday spending, holiday spending budget, holiday spending in canada, ira smith team, Ira Smith Trustee, What is the purpose of Buy Nothing Day

Brandon Blog Post

DEBT CONSOLIDATION IN CANADA: DEBT CONSOLIDATION CANADA REVIEWS

Post author By Brandon Smith
Post date September 18, 2019

Introduction

In Brandon’s Blog, I will be talking about both the advantages and disadvantages of debt consolidation in Canada. Generally, when we hear the words “debt consolidation”, we recognize that we are talking about a loan. We are taking on a new loan, in order to repay several or many smaller outstanding balances.

What is the smartest way to consolidate debt?

People have several choices when it comes to consolidating debt. It always involves borrowing. The theory is that either:

your credit score is good enough so that you can get an unsecured loan; or
you are choosing to offer security for the loan.

The primary objective of settling your debt through this kind of borrowing is to decrease the rate of interest you are currently paying. It is very common for people to have debts spread among various credit cards.

For example, you may have amounts outstanding on 5 credit cards. You are pushing the upper limits of your approved credit. The average annual interest rate you are being charged among those credit cards is 19.9%. If you can get a home equity line of credit at say, an annual interest rate of 5.5%, the benefit is obvious. So it would be a smart choice to offer security to get a consolidation loan.

If you didn’t want to or didn’t have security to offer, you may have a good enough credit score to get an unsecured personal loan. Let’s say you could get this kind of loan at an annual interest rate of 8%. The rate may sound high in today’s interest rate environment, but it is a lot better than 19.9%. So this too would be a smart way to go.

But as I will discuss below, there is a difference between being smart about debt consolidation and settling for what makes sense!

Is it a good idea to get a debt consolidation loan?

If you can get this kind of loan and you are wise about it (more on that in a little bit), I say yes. In the example of the 5 different credit cards I gave, you are juggling multiple debts carrying a high rate of interest and are running out of credit room. The debt consolidation loan will lower the interest you are paying dramatically and will term out your payments.

You will stop being a juggler. That is an advantage.

Should I get a loan to pay off my credit cards?

In a typical debt consolidation funding, you need to get a fixed, not variable, interest rate. You also need to have a fixed repayment schedule which offers you a set time to pay it off. You do not want a variable rate of interest or a revolving line of credit. You want the loan to be automatically reduced with every payment you make, with no chance of increasing the loan for any reason.

That is the kind of loan you need to pay off your credit cards. It is that predictability and certainty that you need to work into your life. If you can get that kind of loan to pay off your credit cards, then that is an advantage and you should.

What happens when you consolidate your debt?

What happens depends on the type of loan you get to consolidate your debt. The various types of loans I have seen people get are:

an unsecured personal loan from their bank
a home equity line of credit or second mortgage
A credit card balance transfer at a promotional interest rate of either a 0% or a special introductory very low rate
in more recent times, a peer to peer loan

I already spoke about the benefits of either a home equity line of credit or an unsecured personal loan. When it comes to a balance transfer, you can obtain introduction rates that are as low as 0% or 1.99% for a specific period of time, such as 12 or 18 months. You need to have sufficient credit available on such a new balance transfer credit card to assume the total debt spread among the 5 credit cards. With banks competing for your business, it may be possible.

What happens when you are able to consolidate your debts into one loan is that you achieve simplification in your life. You now have just one settlement to make. It’s much less to keep an eye on.

Simply put, simplicity is an advantage. As long as you stay current in your new loan payment, you are working towards paying off your total debt.

How does debt consolidation affect your credit score?

Initially, debt consolidation could improve or at least maintain your credit score. Falling behind on credit card balances hurts your credit score. Paying off those loans and being current on your new debt consolidation loan can improve your credit score. However, there are some traps that you cannot fall into. If you do, then you will not have ended up fixing anything and will end up worse off.

So a debt consolidation loan in itself does not hurt your credit score and could improve it as long as you meet the repayment terms of your new loan. A discussion of the traps leads us into a discussion of the disadvantages of this kind of loan. It is important to recognize that it is not a loan that is the problem, it is the person’s behaviour.

Does a debt consolidation loan look bad?

I would rather have a new loan showing up on my credit report, than have my 5 credit card loans going bad on my credit report. A debt consolidation loan is only a loan. Debt consolidation in itself is not bad, it doesn’t look bad. An experienced financial or credit person looking at your credit report will know what you have done. However, it will also show them that you have been able to get a new loan. So it shows that a lender feels you are a good credit risk. None of that is bad.

What is bad, are the traps that you could fall into. If you fall into one of them, it could be bad for you. This is all about your behaviour, not the consolidation loan.

The disadvantages of debt consolidation in Canada

I will discuss the disadvantages of the type of loan and by behaviour.

Home equity line of credit

If you get a home equity line of credit (HELOC) that is anything other than a fixed interest rate loan that is not a revolving line of credit, you could fall into a trap. You are looking for simplicity and certainty. If your interest rate can rise if the prime rate charged by your bank rises, then you are not getting the full benefits.

Granted a 5.5% loan isn’t going to rise to a 19.9% interest rate, but your room for interest rate increases may be small. If a 1% or 2% increase in the interest rate would make the difference between you being able to afford the repayment and not being able to make them, you will constantly be worried about it in an increasing interest rate environment.

You also want to make sure that the HELOC is not a revolving line of credit. Once you make a payment, you want the principal portion of a paydown by each payment to be permanent. You cannot be enticed about the ability to borrow more on the line. Remember, you took on this loan to pay off debt, not to either remain at the same debt level or to increase it.

So having to pay more interest or being able to go deeper into debt are two traps to avoid with this kind of loan.

A credit card balance transfer at a promotional interest rate

As I mentioned earlier, normally these zero or very low-interest promotional rate is for a fixed period of time. So if you can repay the whole amount, in the monthly payments required, within the time period given, it is a great thing. However, if you can’t, then your promotional interest rate goes up to probably at least the average 19.9% rate in our example. Now you are back to where you started.

Maybe you missed a payment; either because something got in your way or inadvertently. Normally when this happens, you immediately lose your promotional interest rate and a fee is charged. That is a disadvantage.

You may have used this method because you were being chased by a bank for your business, but could have used one of the other methods at the time. If that is the case, and you plan for replacing the promotional interest rate loan balance before it reprices, with one of the other methods, then great. However, if you don’t, then you are back to where you started. Maybe not worse off (see more below), but certainly no better, other than for the principal you were able to pay down.

An unsecured loan

Just like a HELOC, if the unsecured loan cannot revolve and has a fixed rate of interest, that is a good thing. If it does revolve and you have not paid down any principal, and/or your interest rate rose, that is a trap. That is a disadvantage.

Do consolidation loans work?

This is where we talk about the biggest trap or the greatest benefit. It all comes down to answering this one question. Has your behaviour changed?

Debt consolidation in Canada is a terrific device when your behaviour changes. The first step to changing your spending behaviour is to budget. I have written several of Brandon’s Blogs on the topic of the need to have a proper household budget and stick to it.

But what if your behaviour doesn’t change? Did you close out the 5 other credit card accounts when you did the debt consolidation loan? Or, did you keep them open and keep running up the balances for spending greater than your income, while paying down your debt consolidation loan?

They were paid down to zero when you consolidated them. Now you have run them back up and have only made the minimal necessary payments. So, once more, you have overspent and are now back to the same stress-filled life as before. There is only one thing different now – you owe even more money, so your life has worsened. Your credit score is probably worse now too.

So if you change your financial behaviour, debt consolidation works well. If you don’t, then it doesn’t either.

What can you do now that a debt consolidation is no longer an option?

There are various options available. Most will negatively impact your credit score and provide a worse credit report. However, when you have run out of options, perhaps a lower credit score stopping you from taking on more debt might be a good thing. Maybe the fact that no one will loan you more money is what you needed as a wake-up call to once and for all get back on track.

The options include:

***Credit counselling* *and budgeting***

Many people require aid with things such as:

budgeting
accomplishing certain financial objectives
a spending plan
learning how to use credit wisely

Often times as soon as this assistance is received, people can continue by themselves with no more troubles.

A consumer proposal or Division I Proposal

A consumer proposal and also a Division 1 proposal are alternatives to bankruptcy. Although equivalent in numerous facets, there are some substantial differences. Consumer proposals are used by people whose debts aren’t greater than $250,000, not consisting of any kind of financial debts registered against your home. Division 1 proposals are for both companies, and for people debts exceed $250,000 (again leaving out home mortgages).

A consumer proposal is a procedure under the Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) (BIA). With the licensed insolvency trustee (Trustee) you make a proposal to:

pay your creditors a portion of what you owe them over a certain period of time not greater than 5 years.
prolong the time you have to pay what you promise to pay in your accepted proposal.
a mix of both

Payments are made to the Trustee. That cash pays the administration fees of your proposal and distributes money to your creditors. When you have made all the required payments, the balance of your debt that you did not pay is written off and discharged forever (with certain exceptions outlined in the BIA).

These are your realistic options, once a debt consolidation in Canada option is no longer viable.

Summary

I hope this Brandon’s Blog has provided you with some insight into when debt consolidation is a useful tool and its advantages. I also hope you can see where it could also be a trap for some people. If debt consolidation relieves the pressure on you because of the state of your finances AND motivates you to budget and bring your spending in line, then it is a good thing.

If it does not change the necessary behaviour pattern that got you into financial trouble in the first place, then things will only get worse. Is it now time for you to take a positive step in the right direction to free yourself from your debts?

Are you in financial distress? Do you not have enough money to pay your creditors as your bills come due?

If so, call the Ira Smith Team today. We have decades and generations of experience assisting people looking for financial restructuring, a debt settlement plan and to AVOID bankruptcy.

A restructuring proposal is a government-approved debt settlement plan to do that. We will help you decide on what is best for you between a restructuring proposal vs bankruptcy.

Call the Ira Smith Team today so you can eliminate the stress, anxiety, and pain from your life that your financial problems have caused. With the one-of-a-kind roadmap, we develop just for you, we will immediately return you right into a healthy and balanced problem-free life.

You can have a no-cost analysis so we can help you fix your troubles. Call the Ira Smith Team today. This will allow you to go back to a new healthy and balanced life, Starting Over Starting Now.

Tags Bankruptcy and Insolvency Act, budgeting, consolidating debt, Consumer Proposal, credit card, credit report, credit score, debt consolidation, debt consolidation in canada, debt consolidation loan, debt consolidation loans, Does a debt consolidation loan look bad?, How does debt consolidation affect your credit score?, Is it a good idea to get a debt consolidation loan?, Should I get a loan to pay off my credit cards?, What happens when you consolidate your debt?, What is the smartest way to consolidate debt?

Brandon Blog Post

FINANCIAL LITERACY: FINANCIAL LITERACY FOR HIGH SCHOOL STUDENTS IN ONTARIO

Post author By Brandon Smith
Post date August 26, 2019

If you would prefer to listen to the audio version of this financial literacy Brandon’s Blog, please scroll to the bottom and click on the podcast

Introduction

When I was in high school, I was very fortunate. I thankfully took two accounting courses, in addition to the normal reading, writing and arithmetic. It was in accounting, that I received some financial literacy education. Anyone who did not take accounting did not get any exposure to basic financial education.

When Ontario grade 10 students go back to school next week, their course curriculum is now amended so that a financial literacy course is mandatory. The purpose of this Brandon’s Blog is to discuss why financial literacy is important and what the new course will offer these students.

What is financial literacy and why is it important?

Financial literacy is the education, learning and understanding of different financial subjects related to handling personal money, budgeting and investing. This topic focuses on the capability to manage individual finance matters in a reliable way.

With such education, people gain an understanding of making suitable decisions about their personal money. Without a basic financial understanding, how can people develop their financial skills? Where will you learn about things such as investing, insurance, budgeting, saving, retired life and income tax concepts?

Why is financial literacy important for students?

The typical high school curriculum of education and learning is extremely important. People generally do not get specialist education until they are in a career program. To become a medical professional, an auto mechanic or a web developer requires specialist education for career success. The one area of education that is generally missing to equip our youth to be able to make smart economic decisions in their lives is proper financial education.

Our society values money and entrepreneurship, yet for some reason, our institutions appear to assume you will somehow just know or pick up the proper financial skills to succeed. Perhaps if there was a mandatory financial education system in place we would see the gap between the rich and poor lessen. Teaching basic financial concepts and skills can go a long way to make sure that people can learn good financial habits and keep their heads above water.

How do you get financial literacy?

The Ontario curriculum for Grade 10 career studies for the first time this school year will include a section on financial literacy. The provincial government believes that it is important for students to understand budgeting and financial management. I applaud this effort.

The education system’s overall expectation is that students will get an understanding of responsible monitoring of financial resources and of services readily available to support their financial proficiency as they prepare for post-secondary life. This is an excellent thing.

I remember my first day at university. Day one all the banks have tables to entice students to sign up for a new credit card. Young adults who have student loans and have never been exposed to financial management courses will now have the ability to take on more debt. Not a good thing.

The specific expectations are that students will:

Learn the principles of financial responsibility
Evaluate the advantages of a variety of financial savings options
Explore financial planning tools available with banks and other sources

What are the three main components of financial literacy?

The three main components that the new financial literacy piece to career studies program will cover are:

Financial responsibility
- setup and follow a budget
- sensibly handling bill payments and using credit wisely understanding the difference between
- knowing the difference between a bank and a credit union
- managing their very own bank accounts
- defending themselves against monetary scams and fraud

Financial savings choices
- types of interest-bearing accounts and their associated rate of interest
- tax-free savings accounts (TFSAs)
- registered retirement savings plans (RRSPs)

Different kinds of borrowing and their advantages and disadvantages
- federal government student loans
- provincial government student financings, such as those available with the Ontario Student Assistance Program (OSAP)
- loans or bursaries from their local cities and towns
- personal (unsecured) loans from a financial institution, be it a chartered bank or a credit union
- lines of credit, credit card and overdraft products
- recognizing the benefits and disadvantages of the numerous kinds of credit products
- how the responsible use of a credit card can boost an individual’s credit score ranking
- how improper use of the same credit card can hamper a person’s credit score ranking
- that the proper use of bank loans can allow a person to pay for a costly item, such as a car or home
- how the improper use of loans and excessive debt can lead to a poor credit rating, money troubles and even insolvency and bankruptcy
- How borrowing from family or close friends can be advantageous, but how defaulting on repayment can negatively impact personal relationships

The teacher’s role

The teacher’s role will be to provide illustrations to drive home these points. In the context of spending and personal finance, the students will learn the difference between “needs” and “wants”. Teachers will ask the students to reflect on exactly how a person’s values will influence their wants or the ways in which they satisfy their needs. Students will learn what “living within your means” really means.

The teacher will lead a discussion on exactly how a person can do this successfully. Students will consider what the impact on a person will be from not paying expenses promptly and from using numerous credit cards.

Students will learn the benefits of beginning to save at a young age. They will be exposed to the advantages of then having a formal financial savings plan. All this will naturally lead to a realization that budgeting for both short-term objectives, such as purchasing clothes, differs from budgeting for long-term goals, such as buying and maintaining a car. Students will also learn about the different types of savings vehicles as well as debt products. They will also learn the proper use of debt.

In my view, the students will learn about the three most important parts of any financial literacy program: 1. proper budgeting techniques; 2. the importance of saving from an early age and the various savings vehicles available; and 3. debt and how to use it properly.

Summary

Hopefully, by exposing grade 10 students to these concepts, they will be motivated to keep learning and using proper financial management techniques. My hope is that more students will come out of high school and begin their post-secondary career, whatever that may be, by having better financial management skills and therefore fewer people will be able to stay clear of insolvency.

Prior to the new mandatory curriculum, the first exposure many people had to financial literacy education was as part of insolvency counselling, which means they already made mistakes before having a chance to learn the basics.

Are you on the edge of insolvency? Are bill collectors hounding you? Are you ducking all your phone calls to the point where your voicemail box is always full?

If so, you need to call me today. As a licensed insolvency trustee (formerly called a trustee in bankruptcy) we are the only professionals licensed, recognized as well as supervised by the federal government to give insolvency assistance. We are also the only authorized party in Canada to apply remedies under the Bankruptcy and Insolvency Act (Canada). I can definitely help you to choose what is best for you to free you from your financial debt issues.

Call the Ira Smith Team today so we can get free you from the stress, anxiety, and discomfort that your cash issues have created. With the distinct roadmap, we establish simply for you, we will without delay return you right into a healthy and balanced problem-free life, Starting Over Starting Now.

Tags Bankruptcy, Bankruptcy and Insolvency Act, budget, budgeting, credit card, credit score, financial literacy, financial literacy course, financial literacy for high school students, financial literacy for students, how do you get financial literacy, insolvency, Ira Smith Trustee, licensed insolvency trustee, trustee in bankruptcy, what are the three main components of financial literacy?, what is financial literacy and why is it important, why is financial literacy important for students

Brandon Blog Post

CANADIAN INTEREST RATE HIKE POSSIBLY SCARIER THAN HALLOWEEN

Post author By Brandon Smith
Post date October 29, 2018

Canadian interest rate hike: Introduction

Does Bank of Canada chief Stephen Poloz anticipate good times generally in the Canadian economic climate to continue or is the marketplace an indicator of a problem in advance? The most recent Bank of Canada interest rate announcement was a Canadian interest rate hike boosting its benchmark rate by 25 basis points to 1.75%.

This is the 5th rise given since July 2017. All indicators show the Bank of Canada rate will boost right into 2019.

Canadian interest rate hike: The tale of two economies

There are presently 2 stories about the Canadian economy. The initial one is that the economic climate is doing well. Sufficiently so that we require to be increasing rates of interest. Mr. Poloz thinks there is a requirement to be tightening up that a bit.

At the exact same time, the second one, the other story, points to an economy that isn’t so great. The marketplace has recently made the case for pessimism. That story is that:

we’re at the actual end of a long great financial run;
a trade battle with China is the precursor of tough times ahead, and
investors are frightened that this can be the time that things start to turn down.

Canadian interest rate hike: What does it mean for you?

There’s a great deal of discussion regarding what that indicates specifically for Canadians. It isn’t that the cautions have not been there for a while. The Bank of Canada records that the typical Canadian household debt is around 170 percent of disposable earnings. The ordinary Canadian owes $1.70 for every single dollar of revenue earned each year, after tax.

Twenty years ago, the ratio was at 100%. So as you can see, there has been a steady climb since the 1990’s in Canadians appetite for more debt.

We have among the highest debt proportion of any of the Organisation for Economic Co-operation and Development participant nations. The concern is have we started to learn the message?

Initially, former Bank of Canada Governor Mark Carney and the former Federal Finance Minister, the late Jim Flaherty desired the Canadian consumer to place the economy on their back and march it up this lengthy high hillside. We did and it worked. Nonetheless, this is the result of it.

Currently, we start to see some indicators that the Canadian consumer is thinking of their budgeting. Stats Canada is reporting that retail sales have actually started to see a slowing down. Individuals are thinking of just how their variable priced loans are costing them more.

The sensible people will certainly begin restricting their purchases to just their needs and not give in to their wants. All this to attempt to maintain their debt in check. Rates of interest are rising so debt costs are going up and will set you back even more. Individuals will certainly concentrate on the requirement to bring costs as well as debt under control. This will lead to a cooling off in the Canadian economy.

Canadian interest rate hike: The US situation

I anticipate the very same practices will certainly happen in the United States. President Trump is already disturbed that the United States central banker Jay Powell is currently raising interest rates. However, Trump is disturbed that elevating rates will certainly tinker negatively with the US dollar. It could also slow down the US economy. If that happens, Donald Trump’s fears his worst nightmare. He won’t be able to truthfully boast how well the US economy is doing under his administration. There have been times already where he’s been plainly irritated the economy is refraining from doing what he wants of it. Mind you, to date, he has not let the truth get in the way of a good boast!

So climbing rates of interest will certainly have a result on the North American economic situation and the marketplaces. Whether interest rate hikes will be scarier than Halloween, only time will tell.

Canadian interest rate hike: Are you uneasy about your household debt?

Do you feel rising debt costs will put you and your family in peril? Do you need budgeting help? Are you already experiencing financial difficulties? If you answered yes to just one of these questions, you need a professional trustee. If yes, call the Ira Smith Team. Our approach for each file is to create an end result where Starting Over, Starting Now takes place. This starts the minute you are at our front door.

We always offer a free consultation. We listen to your issues and provide you with a full range of realistic options to help you get out of debt. There have been numerous times where thinking about all the Canadian debt solutions available, we have advised debtors that they do not need an insolvency process. Rather, maybe they can avoid it by implementing an informal process. If that is your case that if fine with us; finding the best solution for YOU is just the right thing to do to help you achieve total debt freedom.

The earlier you contact us, the more options we will have to implement. Whether it is a corporate restructuring or personal debt settlement through a consumer proposal, the goal is to avoid bankruptcy. However, if bankruptcy turns out to be the best option, we can assist there too.

You’re simply one phone call away from taking the necessary steps to get back to leading a healthy, balanced hassle-free life, ending the pain and stress you are feeling forever. Call Ira Smith Trustee & Receiver Inc. today for your free consultation.

Tags bank of canada interest rate announcement, bank of canada rate, Bankruptcy, budgeting, canadian interest rate hike, central banker, Consumer Proposal, Debt, debt solutions, donald trump, Finance Minister, Halloween, Ira Smith Trustee, Jay Powell, Jim Flaherty, Organisation for Economic Co-operation and Development, professional trustee, stephen poloz

Brandon Blog Post

REBUILDING CREDIT CANADA: USE OUR PAINLESS 3 STEPS TO REBUILD CREDIT SCORE

Post author By Brandon Smith
Post date August 15, 2018

Rebuilding credit Canada: Introduction

After fully completing a consumer proposal or receiving a discharge from bankruptcy, it is important to start immediately rebuilding credit Canada. The purpose of this Brandon’s Blog is to provide you with our foolproof and painless 3 step plan to eliminate those negative credit checks and fix your credit trouble by rebuilding credit Canada.

Rebuilding credit Canada: Step 1 – Create good habits with a plan for discipline and self-control

After your discharge from bankruptcy or the full completion of a consumer proposal, you must create good habits of discipline and self-control. You won’t have any credit accounts and your goal is to show the credit bureaus that you can use credit responsibly and work your way back from bad credit score.

To do that, you need good new financial habits. You need to start creating a good payment history. A lack of these habits might have been partly responsible for your current situation, so working on changing bad habits, and creating new ones will lay the groundwork for a successful financial future.

Research has shown that on average, it takes more than 2 months before a new behaviour becomes automatic – 66 days in fact. So, while at the beginning, having to be disciplined and exert self-control over spending money mistakes might seem like hard work, stick with it for a couple of months, and very soon it will just become part of your daily routine.

Learn discipline through budgeting. You may be able to find a pretty good yet simple budget calculator spreadsheet. Aside from rebuilding your credit, learning how to create a realistic budget by looking at your essential expenses compared to your current level of everyday purchases. This will allow you to get a good handle on what your income requirements are and then sticking to it is the most important step of rebuilding credit Canada after bankruptcy or consumer proposal.

You’ll be looking closely at your money and personal income anyway, so use this time to get a real grasp on your entire financial situation. Take a look at credit cards and related statements. By only making the minimum monthly payment you are being charged interest. Look carefully at what the rate on purchases is that you are really paying.

Understand where your money comes from, and, more importantly, where you spend every penny. You’re going to need to make friends with spreadsheets and familiarize yourself with all your bank and bill statements. Create categories of all your expenses (e.g. rent, electrical bills, car insurance, groceries etc.) Using your past bank statements, look at your current spending plan in each category. You’ll probably be surprised at how much money you spend in some!

Set limits for how much you will spend per month in each category. This will likely mean making some sacrifices to ensure your budget balances (the total amount being spent does not exceed the total amount coming in). However, be realistic – don’t tell yourself you’re going to stop doing things you enjoy together. Instead, cut down on how often you do them. E.g. the budget spending plan for a meal out could be once a month rather than a couple of times a week.

Get in the habit of planning and recording every single expense, no matter how small. Keep receipts and go over where your money has gone every month. Plan rewards for different milestones along the way. It’s important to have things to look forward to and motivate you along the way.

Budgeting takes discipline and sacrifice but stays focused on the goal. You’re doing this to ensure you don’t fall back into the same bad habits as before. You are going to have to change some things – and what better time than while you’re starting over? You’re already doing the work, now the trick is to make this disciplined.

Practice self-control in your spending (and saving!) The golden rule of spending? Learn to live within your means – it sounds simple, but it can very hard to do. However, those who live within their means do not get into trouble with debt, and that’s what you’re working towards for the future! You’ve created a budget, you know exactly what you can spend in each category, now you need to execute on that. By following your

While in bankruptcy or a consumer proposal, any excess money you earn is going to go to your debtors. That may make it seem impossible to save. However, saving money should always be in your plan.

As soon as you are discharged from bankruptcy or your consumer proposal, start saving money every month. Work a specific amount (we recommend 10%) into your budget so that you learn to live within that new budget spending plan. Setting up automatic payments and transfers into your savings account on payday will ensure your money goes where it needs to before you even have time to think about spending it.

So where should this money go? First, establish an emergency fund so that you can avoid facing bankruptcy again in the future. A good emergency fund should cover at least 3 months of living expenses. Once your emergency fund is built, continue to save by contributing to your RRSP or TFSA as much as you possibly can while still meeting your month-to-month expenses.

Forming good habits of discipline and self-control is key to your permanent financial rehabilitation. Once you do so, you’ll find that building your credit will be relatively easy!

Rebuilding credit Canada: Step 2 – Work to rebuild your credit after bankruptcy or consumer proposal

It is true that a record of your insolvency filing will stay on credit reports. This is so for both a consumer proposal (3 years!) or a bankruptcy (7!). However, you can actually start rebuilding credit Canada right away.

There’s an old saying that goes “The best time to plant a tree was 20 years ago. The second-best time is now.” We recommend that you don’t wait 20 years, or even 3.

Here’s what you need to know to start building credit and improving your credit reports today:

Secured Credit Card – A secured credit card looks and functions just like a regular unsecured credit card, with your lender reporting to the credit bureaus on a regular basis. The only difference is that you put up an initial deposit as a security deposit in the form of cash. The minimum deposit or the maximum deposit you can afford to make acts as collateral upfront makes it a secured credit card. The amount of cash you put up as a deposit dictates your credit limits.

rebuilding credit canada

This protects the lender from the possibility of you defaulting on what you owe because your security fund will be used to cover any outstanding amounts. When you use this type of card, as far as the vendor is concerned, it acts just like an unsecured credit card. Every month when you pay off the balance by making your payments on time, it is reported to the credit bureaus. Then each credit bureau can update their records showing you are paying it off on time. That is how it can rebuild credit Canada.

A Secured Line of Credit – Much like a secured card, a secured line of credit is a revolving credit that is secured by the money or other security, you offer up in the beginning. As you use your line of credit and you make your payments on time, you will establish a picture of good money reminders habits which will both boost your credit score. These lines of credit are available through most banks. Again, creditworthiness and collateral, if required, set the credit limits.

Create Your Own Credit Building Programs – Credit building programs are one of the most effective methods for rebuilding credit after bankruptcy or consumer proposal. Programs like borrowing a small amount to invest in your RRSP. Then repay the loan in full before the next RRSP year.

This is beneficial in 3 ways: You don’t have to come up with the funds, you are investing in your future and by repaying the loan, you are showing you can handle credit properly which improves your credit score. This should also be combined with a secured card or line of credit, do double up on your credit score building program. Paying your bills on time also improves your credit score.

You want to follow your budget carefully. Avoiding late payments, making the full payment each month on your monthly credit card balance, not just the minimum payment, and don’t have a missed utility payment. Having timely payments and no late payments on your Canadian credit history, will take a poor credit score and start improving your credit rating by creating a new positive credit history.

An improved credit rating and improving credit reports will overturn the negative effects of your bad credit history, get your credit score ranges to improve, get you the credit score increase you deserve and catch the attention of the credit card company and improve your chances of access to credit products.

These new types of credit becoming available to you, and perhaps even existing credit card issuers giving you a credit limit increase, all go towards your rebuilding credit Canada. But you still need to stick to your spending plan. Just because you are getting access to credit again, does not mean you can abandon your proper budgeting. You don’t want to go back to the old habits that produced the poor credit history.

Whatever kind of credit loans you are looking to take out to help rebuild your credit, make sure you understand things properly. Read the credit applications carefully to see what you are really signing up for. If approved, read the credit agreement carefully so you will fully understand all the terms of the rebuilding credit Canada loan product.

As your credit reports improve, you will find new companies offering you new credit accounts and credit card providers either increasing your credit card limit or sending you applications for new credit cards lines. Again a word of caution. Don’t get carried away with all sort of credit products in your daily life. Keep it simple and stick to your budget. You really may only need one regular credit card from amongst the wide range of Canadian credit cards becoming available to you.

rebuilding credit canada

Rebuilding credit Canada: Step 3 – Maintain your spending plan good habits for the rest of your life

Rebuilding credit Canada is not a one-time event. Think of rebuilding your credit after bankruptcy like losing weight. In the beginning, dragging yourself to the gym and making kale smoothies is hard work. However, as you start to see the weight drop, it becomes easier and easier.

What happens when you reach your goal weight? Do you stop going to the gym and start eating pizza for breakfast? No! You just carry on as you are now – because it’s become a habit, and if you slip back into old habits, you’re quickly going to see all of your hard work come undone.

Regularly checking your full credit reports from both credit reporting agencies will help you see how your good habits are paying off. Kinda like weighing yourself to make sure you’re still where you want to be. If you start seeing negative results, take stock of what’s happening in your life that could be causing it and make changes to quickly get back on track. You want to keep seeing improvement in your credit reports.

Ultimately, whether you’re declaring bankruptcy or entering into a consumer proposal, it will be emotionally difficult. There is a light at the end of the tunnel though. Many people don’t realize that you can start building credit while going through both a bankruptcy or consumer proposal so that at the time of discharge, you’re already a few steps ahead. Follow these steps and you’ll find that rebuilding your credit after bankruptcy isn’t that difficult.

Rebuilding credit Canada: Do you know anyone who needs to get back on the road to financial recovery?

If you have too much debt, are unhappy with your debt situation and need someone to talk to about how a consumer proposal or even personal bankruptcy can fix your credit issues and improve your financial life, call the Ira Smith Team. We are professional credit counsellors and can help you learn good spending habits. Through consumer proposal payment arrangements you can make steady payments on prescribed payment dates. This will allow you to avoid bankruptcy by paying only a fraction of your total debt yet eliminate all of your debt. It will also get you credit repair.

We will listen to your issues and provide you with our thoughts and recommendations for free. That’s right; a no-cost initial consultation. We will look at your debt utilization and make recommendations to you on how to fix it. So why not? All you have to lose is your stress while rebuilding credit Canada. Why not fix things now so that your credit checks improve.

We will advise you whether or not we think you are a candidate for either a consumer proposal or bankruptcy. If we feel you can solve your financial problems without an insolvency process, we will tell you straight. The Ira Smith Team understands the stress you are under and the pain it is causing you and your loved ones.

We can eliminate your pain. I guarantee that you will start feeling better right away after our free initial consultation. Taking action after that will put you on the right path, Starting Over Starting Now

Tags Bankruptcy, budget, budgeting, building credit, Canada, Consumer Proposal, consumer proposal vs bankruptcy, credit building, credit bureau, credit score, emergency fund, Ira Smith Trustee, Line of Credit, personal bankruptcy, rebuilding credit, rebuilding credit canada, secured credit card, secured line of credit

Brandon Blog Post

SECRET DEBT IN MARRIAGE: MANY CANADIANS ARE NOT CRAZY WITH THEIR LOVED ONE’S FINANCES

Post author By Brandon Smith
Post date February 14, 2018

Secret debt in marriage: Introduction

Now that Valentine’s Day is over, we need to not lose that loving feeling. Many Canadians are not crazy with their love one’s finances. They may wish to book a financial date evening. Many are keeping debt secrets from their partner, or fear they are hiding financial information from them. Perhaps now is the time to come clean with secret debt in marriage.

Secret debt in marriage: A recent survey

A brand-new survey identified that Canadians in a relationship (whether living separately, common law or wed) wish they can change a minimum of one of their partner’s financial behaviours. But their loved one could be oblivious. Many reported seldom or never ever talking money or budgeting with them.

Secret debt in marriage: We have previously written about this tender subject

Spouses or partners holding secret debt in marriage is nothing new. We have previously written on the topic, and others involving couples, including the following blogs:

Secret debt in marriage: Couples best practices

When it concerns taking care of debt as a couple, I recommend complete and honest disclosure. Work together to check your debts and make a household budget. Plan together how your household income will allow you both to pay ordinary monthly expenses, pay off debt and hopefully, save for emergencies and retirement.. Budgeting discussions are not easy, but if you can prepare a realistic one and stick to it, your relationship will find a new level of love.

Secret debt in marriage: What if you find out that talking and budgeting is not enough?

Although we are not social workers or marriage counselors, we are expert in helping people work through their financial challenges.

That is why the Ira Smith Team always looks first to see if one of the bankruptcy alternatives would be a better fit for you. The alternatives we look at with you include:

The Ira Smith Team has 50+ years of cumulative experience dealing with issues just like the ones that you’re facing. Give us a call today and let us give you back peace of mind Starting Over, Starting Now.

Tags bankruptcy alternatives, budget, budgeting, Consumer Proposal, credit counselling, Debt, debt consolidation, debt in marriage, financial behaviour, financial challenges, financial secrets, hiding financial information, Ira Smith Trustee, overspending, secret debt, secret debt in marriage, spending, trustee

Brandon Blog Post

EQUIFAX DATA BREACH: 3 THINGS YOU MUST DO NOW

Post author By Brandon Smith
Post date September 20, 2017

Introduction

You may have listened to the news about the Equifax data breach.

Equifax originally said that it impacted only a limited number of Canadians. They have now amended that report to say that 100,000 Canadians are affected. If your details were endangered, Equifax intends to get to you straight away with support as quickly as they have determined that.

In comparison, the Equifax data breach may have affected more than 143 million Americans!

Exactly what took place?

According to Equifax, the violation lasted from mid-May through July 2017. The hackers accessed people’s names, Social Security numbers, birthdays, addresses and, in some instances, vehicle driver’s permit numbers. They also swiped charge card numbers as well as disagreement files with individual identifying information. And they also obtained details of people in the UK and Canada too.

Equifax, is one of the two Canadian credit bureaus, was the subject of a data breach by hackers. This violation has affected lots of Americans, but for now Equifax believes the Equifax data breach has affected just a restricted number of Canadians. Equifax reminds everyone that the hacked US website is for US social security numbers, and does not work for Canadian consumers.

What information was taken?

In Canada, the hackers may have gotten sensitive details, such as names, addresses, and Social Insurance Numbers. Equifax believes that only a limited number of Canadians could have been impacted. They are working to figuring out the exact information. Equifax will update this information as they learn more.

Litigation and investigations begin

Considering that it is one of the largest hacks of the year, the compromised business is now dealing with loads of lawsuits. At least one legal action claims, among other things, that Equifax pumped up financial results to bring up the share price, prior to the hack being revealed. No allegations have yet been proven in Court.

After Equifax announced the Equifax data breach violation about $3 billion was cleaned away from the business’s market cap as its shares dropped by 17% immediately following the disclosure. Lawmakers are concerned that people’s delicate information was not correctly safeguarded. Investigations are ongoing.

Exactly how will this impact me?

The thing is that people who never bought any Equifax services will be negatively affected by the hack. If your details were jeopardized, it may put you at the threat of identity theft. Identification theft is when a person steals your personal information to open new accounts or dedicate activity utilizing your name. We urge you to check your credit score and stay alert in checking your credit card and any other financial account statements.

Equifax data breach: Have my details been endangered?

If you’ve ever before made an application for credit, as an example by requesting a charge card or a cellular phone service, Equifax has gathered your details. Equifax will only contact you if they have identified that your information has been breached. That is why we strongly recommend that you must carefully check all account statements you receive to make sure that: 1. You recognize the account as being yours; and 2. You do not see any suspicious activity in your accounts.

Equifax is the largest credit report bureau in Canada and is extensively made use by lenders, including banks, to prove creditworthiness. Equifax accumulates information from your bank as well as other sources to find your credit history, which is then given to lending institutions.

This case is the tip of the importance of data protection, which is something you must take very seriously. That is why IT people always recommend that you use bank-level encryption to safeguard your data. The Equifax data breach proves them right.

Canada’s privacy commissioner is interested in the Canadian data breach.

The Office of the Privacy Commissioner of Canada has received complaints and calls of concern about this data breach. The privacy commissioner is now considering the matter.

Equifax data breach: Your next steps

Check your credit rating

It’s important you watch your credit report as well as your various financial accounts. That way you will be aware of any kind of adjustments or suspicious activity.

You can do what is called a “soft” credit check on yourself at no cost using one of two Canadian services. We explain it all in our blogs:

Screen your credit card accounts as well as bank accounts

Your charge card and bank accounts are additionally important to watch. Keep an eye out for any transactions you did not make or approve as well as report any problems to your bank or credit card company right away.

Record any theft or crime

If you find a suspicious activity that could involve the theft of either your identity or assets or other criminal offences, report the event to your regional police. You could also report the rip-off or fraud to the Canadian Anti-Fraud Centre. Inform your financial institution as well as bank card firms. As well shut any accounts and cards that could have been hacked instantly.

To find out more, please call Equifax at 1-866-828-5961 or visit their website here.

Equifax data breach: Are you struggling with too much debt?

If you’re struggling with too much debt, give the Ira Smith Team a call. We can help with budgeting and credit counselling so that you can get back on track Starting Over, Starting Now.

equifax data breach

Tags budgeting, Canada’s privacy commissioner, Canadian Anti-Fraud Centre, credit counseling, credit karma canada, data breach, Equifax, equifax breach list, Equifax data breach, Ira Smith Trustee, too much debt

What is a Canadian tax refund?

5 surprising things you can do with your Canadian tax refund

1. Utilizing your Canadian tax refund to plan for your retirement is a wise decision.

2. Donate to a charity or a cause you care about

3. Pay off high-interest debt

4. Take a course or learn a new skill

5. Start or add to your emergency fund

Canadian tax refund conclusion

What is financial literacy in Canada

Why is financial literacy in Canada important?

Financial literacy in Canada and money management go hand in hand

How is financial literacy in Canada assessed?

How is financial literacy in Canada taught in Ontario schools?

What resources are available to teachers for classroom use to teach financial literacy in Canada?

What resources are available for teachers to help parents support their children’s financial literacy in Canada?

Financial literacy in Canada: Canadians share what they wish they learned about money

Ontario Securities Commission Investor Education Fund (IEF) supports financial literacy in Canada

Financial literacy in Canada summary

Introduction

Are you insolvent?

What are my options?

How does bankruptcy in Canada work?

What does declaring bankruptcy mean in Canada?

Personal bankruptcy Canada

Introduction

What is the purpose of Buy Nothing Day Canada?

Is it effective?

Must I resort to a buy nothing Christmas?

But first, it all starts with a budget

Holiday spending in Canada tips list

Summary

Introduction

What is the smartest way to consolidate debt?

Is it a good idea to get a debt consolidation loan?

Should I get a loan to pay off my credit cards?

What happens when you consolidate your debt?

How does debt consolidation affect your credit score?

Does a debt consolidation loan look bad?

The disadvantages of debt consolidation in Canada

Home equity line of credit

A credit card balance transfer at a promotional interest rate

An unsecured loan

Do consolidation loans work?

What can you do now that a debt consolidation is no longer an option?

Credit counselling and budgeting

A consumer proposal or Division I Proposal

Summary

Introduction

What is financial literacy and why is it important?

Why is financial literacy important for students?

How do you get financial literacy?

What are the three main components of financial literacy?

The teacher’s role

Summary

Canadian interest rate hike: Introduction

Canadian interest rate hike: The tale of two economies

Canadian interest rate hike: What does it mean for you?

Canadian interest rate hike: The US situation

Canadian interest rate hike: Are you uneasy about your household debt?

Rebuilding credit Canada: Introduction

Rebuilding credit Canada: Step 1 – Create good habits with a plan for discipline and self-control

Rebuilding credit Canada: Step 2 – Work to rebuild your credit after bankruptcy or consumer proposal

Rebuilding credit Canada: Step 3 – Maintain your spending plan good habits for the rest of your life

Rebuilding credit Canada: Do you know anyone who needs to get back on the road to financial recovery?

Secret debt in marriage: Introduction

Secret debt in marriage: A recent survey

Secret debt in marriage: We have previously written about this tender subject

Secret debt in marriage: Couples best practices

Secret debt in marriage: What if you find out that talking and budgeting is not enough?

Introduction

Exactly what took place?

What information was taken?

Litigation and investigations begin

Exactly how will this impact me?

Equifax data breach: Have my details been endangered?

Equifax data breach: Your next steps

Check your credit rating

Screen your credit card accounts as well as bank accounts

Record any theft or crime

Equifax data breach: Are you struggling with too much debt?

**What is financial literacy in Canada**

**Why is financial literacy in Canada important?**

**How is financial literacy in Canada assessed?**

**How is financial literacy in Canada taught in Ontario schools?**

**What resources are available to teachers for classroom use to teach financial literacy in Canada?**

**What resources are available for teachers to help parents support their children’s financial literacy in Canada?**

**Ontario Securities Commission Investor Education Fund (IEF) supports financial literacy in Canada**

***Credit counselling* *and budgeting***